DoD awards $19.9M contract for motor assemblies, with limited competition and a long performance period

Contract Overview

Contract Amount: $19,939,942 ($19.9M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-05-31

End Date: 2026-08-14

Contract Duration: 805 days

Daily Burn Rate: $24.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MOTOR ASSY TLTH

Place of Performance

Location: NORTHAMPTON, HAMPSHIRE County, MASSACHUSETTS, 01060

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to L3 TECHNOLOGIES, INC. for work described as: MOTOR ASSY TLTH Key points: 1. Contract value appears reasonable given the scope of motor assembly manufacturing. 2. Limited competition suggests potential for higher pricing than a fully open market. 3. Long contract duration (805 days) may introduce risks related to technological obsolescence or changing requirements. 4. This contract supports the Navy's operational readiness by providing essential components. 5. The manufacturing sector for motors and generators is mature, with established players. 6. Fixed-price contract type shifts performance risk to the contractor.

Value Assessment

Rating: fair

The contract value of $19.9 million for motor assemblies is within a typical range for specialized manufacturing. However, without specific details on the complexity and quantity of the motor assemblies, a precise value-for-money assessment is challenging. Benchmarking against similar, recently awarded contracts for comparable motor assemblies would be necessary to determine if the pricing is competitive. The firm fixed-price structure provides cost certainty for the government, but the long duration could lead to cost inefficiencies if market conditions change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under a 'NOT COMPETED' status, indicating limited competition. This suggests that either only one source was deemed capable of meeting the requirements, or the procurement was justified under specific exceptions to full and open competition. The lack of a competitive bidding process means the government may not have achieved the lowest possible price through market forces. Further details on the justification for limited competition are needed to fully assess its impact.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not benefit from the price reductions typically driven by multiple bids. This can also indicate a lack of market responsiveness or potential barriers to entry for other qualified suppliers.

Public Impact

The Department of the Navy benefits from the acquisition of critical motor assemblies for its platforms. This contract ensures the continued operation and maintenance of naval assets. The contract supports manufacturing jobs within the motor and generator industry. The geographic impact is likely concentrated where L3 Technologies, Inc. has manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the long contract duration and fixed-price nature.
Risk of technological obsolescence if the motor assemblies are for systems with rapidly evolving technology.
Limited competition may lead to less favorable pricing compared to a more open bidding process.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Contract awarded to an established entity (L3 Technologies, Inc.) with presumed expertise.
Contract supports a critical defense need, ensuring operational readiness.

Sector Analysis

The motor and generator manufacturing sector (NAICS 335312) is a well-established industrial segment that produces electric motors, generators, and related equipment. This contract falls within the defense industrial base, supplying essential components for military platforms. The market is characterized by a mix of large, diversified manufacturers and smaller, specialized firms. Spending in this sector for defense applications is typically driven by platform sustainment, modernization, and new procurement programs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses. Without a small business set-aside or clear subcontracting requirements, the direct impact on the small business ecosystem for this specific contract is likely minimal, though the prime contractor may engage small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature provides a degree of financial oversight by locking in costs. Transparency is dependent on the level of detail made public regarding the contract's justification and performance metrics. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems
Defense Logistics Agency
Aerospace Manufacturing
Industrial Equipment Procurement

Risk Flags

Limited competition justification requires scrutiny.
Long contract duration poses obsolescence risk.
Potential for price inefficiencies due to lack of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to L3 TECHNOLOGIES, INC.. MOTOR ASSY TLTH

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $19.9 million.

What is the period of performance?

Start: 2024-05-31. End: 2026-08-14.

What is the specific type and technical complexity of the 'MOTOR ASSY TLTH' being procured?

The provided data identifies the item as 'MOTOR ASSY TLTH' and assigns it NAICS code 335312 (Motor and Generator Manufacturing). However, it does not detail the specific technical specifications, intended application, or complexity of these motor assemblies. Understanding the technical requirements is crucial for assessing the reasonableness of the $19.9 million contract value and the justification for limited competition. For instance, are these standard off-the-shelf components, or highly specialized, custom-engineered units for a particular naval platform? The 'TLTH' designation might refer to a specific model or series, but without further context, its precise meaning remains unclear. A deeper dive into the contract's Statement of Work (SOW) or technical exhibits would be necessary to ascertain the exact nature of the motor assemblies.

How does the $19.9 million contract value compare to historical spending on similar motor assemblies by the Department of the Navy?

To assess the value comparison, one would need to analyze historical contract data for similar motor assemblies procured by the Department of the Navy. This involves identifying contracts with comparable specifications, quantities, and performance periods. Benchmarking against these historical data points would reveal whether the current $19.9 million award represents an increase, decrease, or stable trend in spending. Factors such as inflation, technological advancements, and market dynamics over time must be considered in this comparison. Without access to a comprehensive database of past Navy procurements for motor assemblies, it is difficult to definitively state if this contract represents good or poor value from a historical perspective. However, the long duration (805 days) suggests a significant quantity or a long-term supply need.

What are the primary risks associated with the 805-day performance period for this contract?

The 805-day performance period (approximately 2.2 years) for this motor assembly contract presents several potential risks. Firstly, there is a risk of technological obsolescence, especially if the motor assemblies are intended for systems that undergo rapid technological upgrades. If newer, more efficient, or capable motor technologies emerge during the contract period, the procured assemblies might become outdated. Secondly, market conditions for raw materials or manufacturing processes could fluctuate, potentially impacting the contractor's ability to maintain costs under a firm fixed-price agreement, although this risk is largely borne by the contractor. Thirdly, changes in the Navy's operational requirements or platform upgrades could render the specific motor assemblies less critical or obsolete before the contract concludes. Finally, a long performance period can sometimes mask inefficiencies or delays that might be more apparent in shorter contract durations.

What is the justification for awarding this contract on a 'NOT COMPETED' basis?

The 'NOT COMPETED' status indicates that the Department of the Navy did not conduct a full and open competition for this $19.9 million contract. Federal Acquisition Regulation (FAR) Part 6 outlines the policies and procedures for competitive contracting and the exceptions under which non-competitive awards can be made. Common justifications include: only one responsible source exists (e.g., proprietary technology, unique capability), a critical need exists that cannot be met through competition in the required timeframe, or the acquisition is a follow-on to a previously competed contract where only the original contractor can provide the necessary supplies or services. Without the specific justification cited by the agency, it is impossible to determine the validity of the non-competitive award. This lack of competition limits the government's ability to leverage market forces for optimal pricing and innovation.

What is L3 Technologies, Inc.'s track record with the Department of the Navy for similar procurements?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of contracting with the Department of Defense, including the Navy, across various product and service categories. To assess their track record specifically for motor assemblies, a review of past contracts awarded to L3 Technologies by the Navy would be necessary. This would involve examining contract performance history, on-time delivery rates, quality of products, and any past performance issues or disputes. Given their established presence in defense contracting, it is likely they possess the necessary certifications and manufacturing capabilities. However, a detailed analysis of their specific performance on similar motor assembly contracts would provide a clearer picture of their reliability and capability for this particular award.

How does the contract's 'FIRM FIXED PRICE' (FFP) type impact cost control and risk for the government?

A Firm Fixed Price (FFP) contract type is generally favored by the government for its cost control and predictability. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This places the primary risk of cost overruns on the contractor, L3 Technologies, Inc. For the government, this means the total cost of the motor assemblies is known upfront, simplifying budgeting and financial management. However, if the contractor significantly underestimates costs or encounters unforeseen difficulties, they may absorb losses, potentially impacting their motivation or ability to perform on future contracts. Conversely, if the contractor is highly efficient, they retain any cost savings, which can be a strong incentive for performance. The FFP structure is most effective when the scope of work is well-defined and the risks are manageable.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Motor and Generator Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0010423RZB07

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 50 PRINCE ST, NORTHAMPTON, MA, 01060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,939,942

Exercised Options: $19,939,942

Current Obligation: $19,939,942

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $10,903,090

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline